Cango (NYSE:CANG – Get Free Report) and TrueCar (NASDAQ:TRUE – Get Free Report) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.
Institutional and Insider Ownership
4.2% of Cango shares are held by institutional investors. Comparatively, 79.4% of TrueCar shares are held by institutional investors. 29.1% of Cango shares are held by insiders. Comparatively, 3.9% of TrueCar shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Ratings
This is a breakdown of current recommendations for Cango and TrueCar, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cango | 2 | 0 | 1 | 1 | 2.25 |
| TrueCar | 1 | 5 | 0 | 0 | 1.83 |
Risk & Volatility
Cango has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, TrueCar has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500.
Valuation and Earnings
This table compares Cango and TrueCar”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cango | $618.83 million | 0.13 | -$621.95 million | ($2.97) | -0.13 |
| TrueCar | $181.22 million | 1.25 | -$31.05 million | ($0.22) | -11.55 |
TrueCar has lower revenue, but higher earnings than Cango. TrueCar is trading at a lower price-to-earnings ratio than Cango, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Cango and TrueCar’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cango | -83.92% | -49.13% | -24.42% |
| TrueCar | -10.27% | -23.76% | -18.02% |
Summary
TrueCar beats Cango on 8 of the 15 factors compared between the two stocks.
About Cango
Cango Inc. operates an automotive transaction service platform that connects dealers, original equipment manufacturers, financial institutions, car buyers, insurance brokers, and companies in the People's Republic of China. The company offers automobile trading solutions comprising car sourcing, transaction facilitation, logistics, and warehousing support for dealers through Cango Haoche app that offers new car transaction services, and Cango U-Car app that offers used-car transaction services. It also provides automotive financing facilitation services that include facilitating financing transactions from financial institutions to car buyers, which comprises credit origination, credit assessment, credit servicing, and delinquent asset management services; facilitating financing transactions of car purchases for car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People's Republic of China.
About TrueCar
TrueCar, Inc. operates as an internet-based information, technology, and communication services company in the United States. It operates its platform on the TrueCar website and mobile applications. Its platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar certified dealers. The company also offers forecast and consulting services regarding determination of the residual value of an automobile at given future points in time, which are used to underwrite automotive loans and leases, and by financial institutions to measure exposure and risk across loan, lease, and fleet portfolios. In addition, it provides TrueCar Trade, which gives consumers information on the value of their trade-in vehicles and enables them to obtain a guaranteed trade-in price before setting foot in the dealership; and DealerScience that provides dealers with advanced digital retailing software tools. The company was formerly known as Zag.com Inc. The company was incorporated in 2005 and is headquartered in Santa Monica, California.
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